On Monday, April 17, 2023, the Centers for Medicare and Medicaid Services (CMS) released the Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters (NBPP) for 2024 Final Rule (link), and accompanying fact sheet (link). 

The annual NBPP issues standards for insurance companies and the state and federal Marketplaces. This year’s final payment notice addresses technical issues surrounding network adequacy, standardized plan options, special enrollment periods, user fee amounts, methodology for calculating risk adjustment, and requirements for web broker websites. Notably, CMS is not finalizing its proposal to change how brand name and generic drugs are covered under standardized plan options. 

Below is ADVI’s first take on notable proposals included in the final NBPP for 2024.

Network Adequacy and Essential Community Providers (ECPs)
CMS is finalizing proposals to revise the network adequacy and ECP standards to state that all individual market QHPs and all Small Business Health Options Program (SHOP) QHPs across all Exchanges must use a network of providers that complies with the standards listed at §156.230 (link) and §156.235 (link) and to remove the exception that these sections do not apply to plans that do not use a provider network.
 
CMS also is finalizing its proposal to establish two additional major ECP categories for Plan Year (PY) 2024 and beyond: 1) Mental Health Facilities and 2) Substance Use Disorder (SUD) Treatment Centers. Additionally, CMS is finalizing its proposal to retain the overall 35% provider participation threshold and to extend the 35% threshold to Federally Qualified Health Centers (FQHCs) and Family Planning Providers. CMS reiterates that these changes would have a positive impact on health equity by increasing provider choice and access to care for low-income and medically underserved consumers.

Standardized Plan Options
CMS finalized several changes to standardized plan options, including the following.

In contrast to the finalized 2023 Payment Notice, CMS finalized for PY 2024 and beyond to no longer require issuers in the Federally Facilitated Marketplaces (FFM) and State-based Marketplaces on the Federal Platform (SBM-FPs) to include a standardized plan option for the non-expanded bronze metal level. Issuers offering Qualified Health Plans (QHPs) must offer standardized options at every other product network type and metal level and throughout every service area they offer non-standardized QHPs.
CMS finalized a limit on the number of non-standardized plan options that QHP issuers can offer on the Federal platform to four non-standardized plan options per product network type (e.g., HMO, PPO) and metal level, and inclusion of dental and/or vision benefit coverage, in any service area for PY 2024. CMS will reduce the limit to two non-standardized plans for PY2025 and beyond. This requirement would not apply to state marketplaces or plans offered through the SHOP.
CMS had previously proposed applying the two non-standardized plan limit beginning in 2024, without an interval year with a four-plan limit.
As an alternative to this approach, CMS had proposed to group plans by issuer ID, county, metal level, product network type, and deductible integration type, and then evaluate whether plans within each group are “meaningfully different” based on differences in deductible amounts. CMS sought comments on this proposal and chose to not finalize this standard, noting it believes that “directly limiting the number of non-standardized plan options that issuers can offer would be a more effective and straightforward approach.”
Prescription Drug Provisions
After reviewing public comments, CMS did not finalize its proposal to require issuers of standardized plan options to:
Place all covered generic drugs in the standardized plan options’ generic drug cost-sharing tier, or the specialty drug tier if there is an appropriate and non-discriminatory basis.
Place brand name drugs in either the standardized plan options’ preferred brand or non-preferred brand tiers, or specialty drug tier if there is an appropriate and non-discriminatory basis.
“Non-discriminatory basis” means there must be a clinical basis for placing a particular prescription drug in accordance with §156.125 (link).
CMS acknowledged that although the proposal had the potential to enhance predictability for beneficiaries, it should take time to study the impact of this policy concerning comments received on:
The role of formularies to manage increasing costs,
The changing nature of the relative costs of generic and brand name drugs, and
The risk of decreased medication adherence due to tier placement changes.

Special Enrollment Periods
CMS is finalizing its proposal that Marketplaces have the option to implement a new rule for consumers losing Medicaid or CHIP coverage that is also considered minimum essential coverage. Consumers will have 60 days before, or 90 days after, their loss of coverage to select a Marketplace plan.

CMS made two modifications to its original proposal to provide State Exchanges additional flexibility:
First, State Exchanges are permitted to provide a qualified individual losing Medicaid or CHIP coverage with more time to select a QHP, up to the number of days provided for during the applicable Medicaid or CHIP reconsideration if the State allows a longer reconsideration period.
Second, State Exchanges may implement this special rule as soon as this final rule takes effect, instead of on January 1, 2024, as stated in the proposed rule. State Exchanges may still choose to implement the rule on January 1, 2024.
CMS states that this change aligns the Medicaid or CHIP SEP period with the 90-day Medicaid or CHIP reconsideration period, which allows consumers the opportunity to have their eligibility for Medicaid or CHIP coverage reconsidered without having to resubmit a new application with their State Medicaid agency.

CMS is also finalizing its proposal to change the current coverage effective date requirements so Marketplaces can offer earlier coverage effective start dates for consumers who would otherwise experience a gap in coverage.

Premium Adjustment Percentage and Payment Parameters
Consistent with policy finalized in the 2022 Payment Notice (link), CMS issued the 2024 benefit year premium adjustment percentage, the maximum annual limitation on cost sharing, the reduced maximum annual limitation on cost sharing, and the required contribution percentage via guidance on December 12, 2022 (link).

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